Vietnam Prime Minister Nguyen Tan Dzung has approved the project: “Building and developing derivatives market in Vietnam” by issuing Decision No.366/QD-TTg which approve derivatives market establishment and development in Vietnam.
Pursuant to Decision No.366/QD-TTg, establishing and developing derivatives market, there are three phases from simple to complex.
Phase 1: from 2013 to 2015, Vietnam needs to build a legal framework, improve and complete infrastructures and technologies including transaction systems, monitoring systems in the Departments of Stock Exchange, Vietnam Securities Depository Center and market participants.
Phase 2: from 2016 to 2020, when the derivatives market is going to operate. First operations are derivatives based on stock indices, Government bonds and shares.
Phase 3: After 2020, Vietnam needs to improve and enhance the quality of derivatives market.
In market improvement phase, derivatives permitted to be transacted are future contracts based on stock indices and Government bonds. Vietnam Securities Depositary (VSD) is the only organization that performs the function of clearing and settling of derivatives. Members of derivatives market includes trading members, clearing and settlement members. Trading members are securities companies, commercial banks approved and eligible as a derivative members of the stock exchange by the State Securities Commission. Clearing and settling members are securities companies, commercial banks which are qualified for being a member of the VSD. The Stock Exchange monitors the activities of derivatives market members and derivatives trading on stock exchange. VSD monitors the activities of clearing and settlement. The establishment of derivatives market will to contribute to the development of financial market in Vietnam.
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